Homstead Enterprises v. Johnson Products, Inc.

540 A.2d 471, 1988 Me. LEXIS 122
Supreme Judicial Court of Maine·Decided April 26, 1988·Published·Cited by 5 cases

Opinion

GLASSMAN, Justice.

The plaintiff, Homstead Enterprises (Homstead), appeals the decision of the Superior Court, Penobscot County, affirming the judgment of the District Court (Newport) for the defendant, Johnson Products, Inc. (Johnson), on Homstead’s complaint for forcible entry and detainer. 14 M.R. *472 S.A. §§ 6001-6016 (1980 & Supp.1987). The District Court held that Johnson Products, Homstead’s commercial tenant, was legally occupying the premises under an extension of the original lease agreement with Homstead and that the remedy of forcible entry and detainer was thus not available to Homstead. We agree with Homstead’s contention that the court erred as a matter of law in interpreting the rights and duties of the parties under the lease agreement and vacate the judgment of the Superior Court.

Pursuant to a fifteen year lease dated June 30, 1971, Johnson Products occupied commercial property located in Dexter owned by Homstead Enterprises. The lease provides that the premises be used “only for the sale of automotive fuel and automotive additives.” The District Court found that Johnson had been selling other items on the premises “since nearly the beginning of the term of the lease,.... [until] near mid-December 1986,” despite the oral objection of Homstead in August, 1986.

On September 30, 1986 Johnson notified Homstead of its intent to extend the lease for an additional fifteen year term on the expiration of the original term on December 31. 1 Homstead refused to recognize Johnson’s attempt to exercise the extension option, citing Johnson’s sale of non-automotive products as a default under the lease that made Johnson ineligible to exercise the option.

In its forcible entry and detainer complaint, Homstead alleged that Johnson has been a tenant at will since January 1, 1987 and unlawfully refused to leave the premises pursuant to Homstead’s February 18, 1987 notice to quit the premises by April 1. The District Court held that Johnson’s occupancy of the premises after December 31, 1986 was pursuant to a valid lease and that the summary action of forcible entry and detainer was unavailable to Homstead. The Superior Court affirmed the judgment for Johnson, and Homstead appeals.

When, as here, the Superior Court acts as an intermediate appellate tribunal, we directly review the judgment of the District Court to determine whether that decision contains any error of law that affects the validity of the judgment. Town of Ogunquit v. Brazer, 489 A.2d 505, 506 (Me.1985); Bigney v. Blanchard, 430 A.2d 839, 843 (Me.1981).

The District Court concluded that because the lease extension did not take effect until the original lease expired Johnson need be free from default only at the date of the expiration of the original term, here December 31, 1986. The court found that since Johnson had discontinued the sale of non-automotive products in mid-December, it was not in default under the terms of the lease on December 31. Accordingly, the court found that Johnson had properly exercised its option to extend the lease agreement.

We hold that the District Court erred as a matter of law in its determination that the date of the expiration of the original term marked the point at which Johnson must be free from default in order effectively to renew the lease agreement pursuant to its terms. The lease agreement expressly provides that, “Provided that Lessee is not in default hereunder, Lessee shall have the option to extend this lease.... Lessee shall exercise [this] right ... at least ninety (90) days prior to the expiration of the original term.” (Emphasis added). We hold this express language of the lease to require the lessee to be free from default at the time it exercises its option to renew the lease agreement. See Derman Rug Co., Inc. v. Ruderman, 4 Mass.App. 437, 350 N.E.2d 727, 730 (1976) (court held that identical lease provision required freedom from default at time of renewal notice). See also Hillhaven, Inc. *473 v. Care One, Inc., 620 S.W.2d 788, 791-92 (Tex.Civ.App.1981, writ ref’d., n.r.e.).

Whether Johnson properly extended the lease thus turns on whether Johnson was in default of the terms of the lease when it gave notice on September 30, 1986 of its intent to extend the lease. The District Court found that although Johnson was selling non-automotive products in violation of the lease until mid-December 1986, Hom-stead, by its failure to give Johnson written notice of its default prior to September 30, had waived its right to enforce the lease provision prohibiting such sales prior to that date and thus could not now claim that Johnson was in default on that date.

Free access — add to your briefcase to read the full text and ask questions with AI

Homstead Enterprises v. Johnson Products, Inc., 540 A.2d 471, 1988 Me. LEXIS 122 (Me. 1988).

540 A.2d 471 (Homstead Enterprises v. Johnson Products, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

In Re Christopher H.
2011 ME 13 (Supreme Judicial Court of Maine, 2011)
Irving Oil Corp. v. Maine Aviation Corp.
1998 ME 16 (Supreme Judicial Court of Maine, 1998)
Vice v. Leigh
670 So. 2d 6 (Mississippi Supreme Court, 1995)
Ringuette v. Ringuette
594 A.2d 1076 (Supreme Judicial Court of Maine, 1991)
Chamberlain v. Porter
562 A.2d 675 (Supreme Judicial Court of Maine, 1989)